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Islamic Participation Papers to Provide International Finances for Infrastructural Projects
The Public Relations Department of the Organization for Investment, Economic & Technical Assistance of Iran (OIETAI) cited Mr. Alishiri as saying: "with the release of Islamic foreign currency participation papers for foreigners, the international finances will be provided for infrastructural projects of Iran”.
The Public Relations Department of the Organization for Investment, Economic & Technical Assistance of Iran (OIETAI) cited Mr. Alishiri as saying: "with the release of Islamic foreign currency participation papers for foreigners, the international finances will be provided for infrastructural projects of Iran”.

Alishiri went on to say that publication of Islamic foreign currency participation papers is a positive and necessary step in operationalizing the development, infrastructural and high-priority projects of Iran and added: “by releasing these papers we are actually pursuing various objectives and for the first time the country and its government have a credit base so that other economic enterprises of the country can supply the finances they require. As the result, projects will be finished in a shorter time”
The Vice Minister of Economics and Finances, however, reiterated that: “investment projects need to be sufficiently justifiable both economically and financially so that they can repay the finances they have received through the revenues they make”.
Islamic Foreign Currency Participation Papers as a Successful Model for International Financial Markets
Alishiri went on to say: "the issuance of Islamic foreign currency participation papers up to the 5 billion Euro limit conveys a new message to the international markets that international transactions can be made with more transparency and healthiness through the Islamic model
A Chance for Domestic Companies to Gain Entry into Global Markets

According to Mr. Alishiri, the Iranian companies may enter global markets relying only upon their company and credit risks and without government’s financial interventions or guarantees. Alishiri added: “the offering of Islamic foreign currency participation papers as the new instruments for provision of finances to global markets can remove the shortcomings of the classic financial instruments based on fiat money and may serve as a new model for global transactions”.

Responding to the question that “similar papers were released by the Central Bank of Iran under the same title in the past, too, but did they manage to achieve an appropriate credit rank for Iran?”, he said: “in the past, the release of participation papers by the Central Bank was like a good practice for the Iranian economy but bear in mind that there is no such thing as the foreign currency papers of the central banks in the international finance system and they don’t create a reliable credit base for the economy of a country and we don’t recommend it for political and economic reasons”.
However, he reiterated that “the credit risk of countries is obtained by analyzing the indicators of the macro economy, management of public spending, transparency in the general performances of the economy, business climate and political risks”.
Alishiri went on to say that the ministry of economy as the regulator of the financial policies of the country and the first and immediate body to come into contact with international ranking organizations, has to constantly control and guide these processes and added “the release these papers is a like a new behavior in international dealings and we need to gradually incorporate this new economic practice into the international financial matters”.
● The Advantages of the Islamic Foreign Currency Participation Papers

According to Mr. Alishiri, based on this new Islamic method, the buyers will be allowed to have financial and operational supervision over the lifespan of a project. He reiterated:  “the audited financial reports of the projects will be presented to the owners of the papers annually. Of course, domestically the same thing is done based on the satisfaction and trust between the releaser and the owners of the papers, therefore the cautionary measures should be taken also.”
The Difference between he Islamic Participation Papers and the similar International Financial Papers

Responding to a question on the difference between the Islamic foreign currency participation papers and other common and almost similar international papers, Mr. Alishiri said: “all the processes from preparation to release of the papers are almost the identical; however, the Islamic foreign currency participation papers are different from other regular international papers in two major ways. Firstly, these papers must be offered to the market based on the real financial assets and for the high-priority projects of the country. Secondly, the owners of the papers will not only get a dividend of the papers themselves (that is determined according to the credit rank of the country), but they will also receive a operational dividend over the duration of the project”.
Alishiri warned that we need to be wary of the existing behaviors in international arena and take into consideration the upheavals and fluctuations so that the sale of the papers will be sold successfully and at a proper price and then in the later stages, we need to try to guide the indices of the macro economy to optimize the price of the papers. He then added: “we are now at the stage of selecting the final projects and, at the same time, we are talking and consulting with the international markets, and thanks to my colleagues’ unsparing efforts and accuracy, we have made good progress”.  
In conclusion, he urged the major economic enterprises of the country to observe transparency especially in finances to be ready to be directly present in international markets.
 
Feb 21, 2010 11:40
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